I used to think that by the time I turned 30, I’d be financially set. I sort of glamorized the fourth decade of life like Jenna from the film 13 Going on 30. Like, I graduated from college EIGHT years ago. I’ve got legit work experience, and I need anti-aging skincare! I deserve nice things and an awesome vacation, right?

Eh, maybe-maybe not. Movie characters in their 30s live in Manhattan apartments WAY too big for their movie character jobs (have you ever noticed that?), drive expensive new cars, sit on designer sofas, and are professionally styled.

What don’t 30-something movie characters do? Debt-busting, 401K investing, emergency-fund building, sinking fund saving, and all that other stuff that doesn’t make a glamorous movie. But it does make you REAL rich, instead of fake rich.

So if you want to be rich in REAL LIFE and not pretend rich like a movie character, avoid these major money mistakes in your 30s.

Letting those college loans hang around like a bad roommate

Guys, I hate to say it, but college was over a decade ago. It’s time to get rid of the school loans, along with the ratty college t-shirts shoved in the back of your dresser. Minimum payments feel manageable, but debt isn’t something to “manage,” it’s something to annihilate. The interest you’re paying just isn’t worth it, and imagine what you could do with that extra cash if it weren’t going toward paying off debt! As retirement expert Chris Hogan says, “Interest you pay is a penalty. Interest you earn is a reward.”

Buying a house before building an emergency fund

Owning a home was THE DREAM for me. We did apartment living for a LONG time, and I was sooo sick of it. I get it! I want you to own a home, too. It’s tough being confined to cramped living quarters, especially if you have kids, and especially when it seems like all your friends are buying houses and decorating with the Pottery Barn catalog.

But most people jump into the housing market before building an emergency fund of three to six months of living expenses, and this is a huge mistake! I can’t tell you how many clients in their 40s and 50s come to me with debt disasters primarily because they didn’t have the money to make emergency repairs and replace broken appliances. The last thing you want is for your house to be a financial burden. I know renting for now feels like a waste, but buying a house without an ample emergency fund is asking for serious trouble.

Not investing in a Roth IRA

We all know we should take advantage of our employer’s 401K match, but you’re giving up a major tax break if you’re not investing in a Roth IRA. With a traditional IRA, you get to invest tax deferred money, which is awesome for the current tax year (since the amount you invest is deductible), but you have to pay income tax when you withdraw the money in retirement. With a Roth IRA, you invest after-tax money (so no tax deduction this year), but it’s nontaxable in retirement. Including all the interest that’s been accruing for the last 30-some years. YAY! Ideally, you want to invest 15% of your gross income. Start with the percentage that your employer matches, then contribute the $5,500 max to a Roth IRA. If you’re still not at 15%, top off the rest with your work’s 401K.

Increasing your lifestyle with every raise

Yeah, you’re 30 and flirty and thriving (we are friends if you know the reference), but that doesn’t necessarily mean you can afford to spend more every time you get a raise. If you’re debt-free, have a full emergency fund, and are contributing 15% to retirement, then it’s totally appropriate to save for a vacation, buy a nice piece of furniture (with cash), or increase your restaurant budget. Just don’t go crazy and forget to save for medium and long-term goals, like your next car and the kids’ college funds. If you’re in debt or haven’t been able to invest 15% for retirement, then use raises to ramp up hitting those goals first.

Financing Large Purchases

A “good deal” is NOT based on monthly payment. Seriously, this monthly payment nonsense is getting out of control. The average car loan is now SEVEN YEARS. But I digress… suffice it to say this is not the time to get in the habit of financing appliances, cars, lawn mowers, mattresses, or anything else, even if it’s 0% down for a billion years. It’s easier to establish good habits now like saving up and buying with cash than it will be to clean up a mess later. Don’t tie yourself down to monthly payments other than your regular bills. Don’t you have enough bills already?

Instead, create a sinking fund for upcoming purchases. Simply divide the amount you need to have saved by the number of months you plan to save, and set aside that amount each month in a savings account. This works for everything: cars, Christmas, vacations, furniture, anything that’s a bigger expense than you can work into the monthly budget. A little delayed gratification and planning goes a long way in saving you money and the stress that a litany of payments inevitably causes.

If you’ve already made some of the mistakes on this list, it’s not too late to turn things around! You have a long time to invest and today is the perfect day to start making progress on your financial goals. A little discipline and commitment to a debt-free lifestyle will set you up for success for the rest of your 30s and will pay off big time for all the decades ahead.

Buying a house is the biggest purchase you’ll make in your life, and once the papers are signed, you can’t return it, so it’s important to get this one right. The problem is, there’s so much pressure to buy a house as soon as possible that it’s easy to rationalize why you need to buy one rightnow!

From hearing comments about “wasting” money on rent, to seeing your friends buy THEIR own houses, to speculation about rising home prices, it’s perfectly understandable to want to lock yourself into an affordable mortgage at a low interest rate and get started on all those Pinterest home decorating projects you’ve been daydreaming about.

I understand the longing to be a homeowner. After living the apartment life for over a decade while my friends hosted dinners in their recently purchased homes, I was beyond ready to buy! But more importantly, I knew we were financially ready. And I’m grateful we waited for the right time to buy for OUR family, not our friends’ and neighbors.

See, buying a house involves a lot more than a mortgage payment. There are SO many costs to consider, not to mention lifestyle changes that come with being a homeowner. These aren’t necessarily good or bad things, they’re just realities, and you want to know EXACTLY what you’re getting into before signing the closing documents.

If you’re thinking that you might be ready to buy a house now or even a few years from now, here’s what you need to do to prepare.

First, pay off all your debt. This includes student loans, credit cards, personal loans, even car payments. PS, did you know that if you close your credit card accounts and all debts are paid off, you can have a credit score of zero?

But wait, you can’t get a mortgage without a credit score, can you? Actually, yes, you can! Lenders can underwrite your loan application manually. All you need to prove is a history of paying your rent and other bills on time.

All that aside, if you pay off your debts yet keep some accounts open, you’re bound to have an excellent credit score, so don’t go increasing your credit limit to prepare for a mortgage! Just stick with your debt-free status and you’ll be fine.

After you’re completely debt-free, save three to six months of living expenses for emergencies. This is your full emergency fund, and it is of the utmost importance to have. I know it seems like a lot of money, but houses require a lot of maintenance and emergency repairs WILL happen. You never know if your heater will quit in the middle of winter, or if your basement will flood, or when fence posts will need fixing, or a sprinkler will bust, or a window will break, or… okay, you get the idea! When you own, you’re responsible for fixing EVERYTHING!

If you’ve got thousands of dollars stashed away for these things before you move in to your new home, repairs will be a minor inconvenience instead of a recipe for financial disaster. I want you to LOVE your home, and that will only happen if you have the money to take care of it.

Once you have your full emergency fund of three to six months’ expenses in place, you’re ready to save for a down payment. To be totally candid, there are different points of view on how much to put down, and they all have some merit. My recommendation: aim to put down 20% to avoid paying private mortgage insurance (PMI). PMI can easily be $100 a month or more, and you have better things to do with your money.

This brings up another question: 20% of what? How much house can you afford? This is another topic that financial experts tend to disagree on! On one end of the spectrum, some financial coaches and advisors will say to borrow as much as you can for as little down as possible. On the opposite end of that spectrum, Dave Ramsey recommends only borrowing what you can get on a 15-year mortgage, and that the payment, taxes, and insurance don’t exceed 25% of your monthly take-home pay. Even better if you pay for the whole thing in cash!

For the most part, I lean toward Dave’s advice on this one. We have a goal of getting our house paid as fast as possible, hopefully in even less than 15 years (fingers crossed). Just think what you could do without a house payment! However, I do think you need to consider market conditions and interest rate trends.

Allow me to unpack that a little because there’s an important distinction to make.

Let’s say you can qualify for a 20-year loan, you have a 20% down payment, you have excellent visible cash-flow (your job field is ultra-stable) and interest rates are moving in an upward trend, I’d probably buy now rather than wait a year or two.

But, if you’re in debt up to your ears and you’re worried about getting priced out of the market in three or four years, I’d most definitely wait until the timing is better for YOU. You can’t predict what interest rates or the housing market will look like that far off, so don’t let fear of tomorrow cause you to get into a financial mess today.

Those are some good basic spending parameters, but there’s a little more to answering the question of how much to spend on a house.

Which is why I’m going to share with you the single wisest piece of advice I have ever received about home buying. I got this advice from a financial coach who has worked with Dave Ramsey AT Ramsey Solutions for years, so ya know it’s from the best of the best! Here’s what he said:

Think about the lifestyle you want to have, then make your budget with that in mind, and THEN see what kind of mortgage fits into your budget.

Pure wisdom.

How many people do you know who struggle to make their house payment, or wish they had bought a smaller home in exchange for the ability to give more, and do more? A house isn’t supposed to hold you back from doing the things you want to do with your life; the mortgage needs to acquiesce to your lifestyle, not the other way around.

The next thing to consider is adding a house maintenance fund to your budget, ‘cause the thing is, you don’t want to dip into that emergency fund unless it’s a REAL emergency. And for the most part, you should be anticipating regular maintenance needs. You will need a roof every 20 (or so) years. You will have to replace the water heater. Appliances will break down. So, make sure to budget at least a couple hundred bucks a month for maintenance, and keep in mind this is a very general amount; the amount you need is going to depend primarily on the size of the house and the materials it’s made of, so you’ll want to crunch some numbers and get a ballpark estimate.

Before we moved into our house, we altered our budget for four months to see what life would be like with the new mortgage payment and higher maintenance costs, and we put the extra money aside in savings for moving expenses and furniture. It gave us a realistic picture of what we could afford and gave us the confidence to feel comfortable with our decision. As important as it is to have the budget work out on paper, I definitely suggest taking a few months to live on your new estimated budget before committing to it. That way, you get to feel the numbers, which is totally different than seeing it hypothetically on a spreadsheet.

The home buying process can either be a blessing or a curse. If you wait until you’re financially prepared to buy and know what you can afford, it will be a blessing. Otherwise, you’re likely to end up trapped with a mortgage you can barely handle or making lifestyle sacrifices you regret. Get out of debt, build a robust emergency fund, save a 20% down payment, and budget realistically for home maintenance so that you can love your home, and your life.

Do I pay the high interest loan before the student loans? What if I owe the IRS? Should I get the car repaired or pay the credit card? Should I take advantage of my employer’s 401K match or pay cash for graduate school? How much do I need to save for retirement? How do I balance long-term goals and short-term savings?

Life doesn’t fit into a neat little box, no matter how hard we try, and to make matters more complicated, it seems there are twenty different answers on the internet for every one financial scenario. It’s like trying to find the best cheesecake recipe when you’ve never made a cheesecake. There’s no reference point. And this a little more important than a cheesecake.

So instead of prescribing an intricate scheme that looks nice on Pinterest but doesn’t translate to real life, I want to take you through the Seven Baby Steps. Designed by Dave Ramsey, the Seven Baby Steps is your surest, fastest way to building (and keeping) wealth. Keep in mind, this is not a get-rich-quick kind of deal, but a principles-based plan that—if you follow it without skipping steps—will allow you to build wealth over time.

Baby Step 1: Save $1000 as a starter emergency fund. Save up $1000 as quickly as humanly possible and put it into a separate savings account, preferably a money market account where you’ll get a little interest. Order some checks, and your starter emergency fund is all set. This must be complete before moving to step two, or you will almost certainly get stuck in a debt cycle whenever a minor emergency pops up.

Baby Step 2: Pay off all non-mortgage debt. Make a list of debts, starting with the smallest balance and ending with the highest balance, regardless of interest rate. Pay the minimum payments on everything except for the smallest debt. As you cross off each debt on the list, add the payment from the previous debt onto the payment for the next one.

Baby Step 3: Complete your emergency fund, which consists of three to six months of living expenses. Whether three, six, or somewhere in-between, you’ll want to have several months of living expenses set aside (not your whole paycheck, just what will cover basic expenses). This is like an insurance policy that creates a buffer between you and any life events or significant financial emergencies.

Baby Step 4: Contribute 15% of your gross income to retirement accounts. This one can be painful to wait for, especially if your employer offers a 401K match and you’re still in Step 2, but trying to manage debt and invest is counterproductive to wealth-building. It’s like trying to plant a garden over a mess of weeds. You won’t be able to harness the power of your biggest wealth-building tool—your income—when you’re strapped with debt. Clean up the debt first, then focus on investing.

Note: Steps 4, 5, and 6 are done concurrently.

Baby Step 5: Save for college. If you have little ones, they will most likely go to college or trade school, and that takes a lot of money. The earlier you can start saving, the better. Even if you aren’t able or do not plan cover your child’s entire tuition bill, there are some excellent (and some terrible) tax-deferred investment options to help your future scholar. Take caution: don’t become overwhelmed by rising tuition costs and sacrifice Step 4. Retirement is going to happen and there are only so many ways to pay for it. However, there are several ways to fund college that don’t involve going broke.

Baby Step 6: Pay off the house early. Can you imagine what it would be like not to have a house payment? Amazing hardly begins to describe it. That’s so much money! Better yet, it is possible to accomplish: those who follow this plan pay off their house in an average of seven years.

Baby Step 7: Build wealth and give generously! Because at this point, there’s nothing else to do! I love the focus on giving here, because building wealth isn’t the same as wealth hoarding. What we do with what we have matters more than how much we have.

Life will always be complicated, but having a plan will help you stay focused and on-track. The Seven Baby Steps is a tried-and-true process for staying out of debt and building wealth.

Hi there! I’m Lauren.

I'm a Dave Ramsey-trained financial coach, wife to Kyle, mom of twin girls, and a follower of Jesus. I believe that personal finance shouldn't be complicated or overwhelming, and that with a plan, you CAN achieve your financial goals.